Miscellaneous Thoughts
I watched a pretty good movie this weekend. A Beautiful Mind, starring Russel Crowe -- anyone catch it this one yet? There's a scene where a beautiful blond women and a couple of her brunette friends walk into a bar, the guys spot the blond and look to see where and on who her eyes land. The John Nash “premise” is that the guys desire and want the blond, although, in their minds they believe the chances of being rejected by her are a lot higher than if they shoot for her not-so-hot brunette friends. In turn, leaving the pretty blond standing there by herself and eventually going home alone. His speculation is that the most logical choice is to pursue the blond, because the competition for the others will be much higher.
-
Gold and the Canadian and Australian currencies: In either event, it’s highly unlikely that Central and Commercial Banks and other financial institutions around the world will be hedging their currency risk with Canadian money for very long, the market is too small and too dependent on the U.S. economy for it’s own survival. The population of Canada is less than the state of California, and Australia’s population is less than New York’s head count, so that leaves us with gold? The market cap of the precious metals sector is about half of Cisco Systems market cap - is the PM sector too small for the world to invest in too?
-
Charts, Graphs, Statistics and Damned Lies: I’ve heard that the precious metals sector is manipulated by governments and commercial bankers around the world (oh no, say it isn’t so). Could they alter the rhythm of a free market by giving us the appearance of a bearish chart? Could this send the herd, uh, I mean, traders in a predetermined direction and bid up other currencies as the dollar drops along side the swooning price of gold? Would this destroy the status of “safe-haven” that gold has been titled with, yet again?
-
As with all Central Banks, gold is second to the U.S. dollar as their biggest holdings - the fear that is now being instilled into the market is that the Central Banks will sell off gold to prop up the latter. Could this be true? Think about it... could or even would a government sell a scarce and precious commodity like gold which is rising in price to support a scandal tainted fiat currency? Could there be political repercussions in their own political domains?
Just a few thoughts rattling in my head on this sleepless evening.
Regards,
Frank P. |
